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China warns U.S. of "serious damage"

China summoned the U.S. ambassador and the Defense Ministry warned Tuesday of "serious damage" to military relations after the United States charged five Chinese army officers with hacking into U.S. companies to steal vital trade secrets.

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China warns U.S. of "serious damage"

Not surprisingly, China was vehement in its reaction to criminal charges against members of its military. Tensions only stand to mount.

CBS/AP
10:29 a.m. EDT May 20, 2014

A man walks past a 12-storey building (back C) alleged in a report on February 19, 2013 by the Internet security firm Mandiant as the home of a Chinese military-led hacking group after the firm reportedly traced a host of cyberattacks to the building in Shanghai's northern suburb of Gaoqiao. Mandiant said its hundreds of investigations showed that groups hacking into US newspapers, government agencies, and companies "are based primarily in China and that the Chinese government is aware of them."(Photo: PETER PARKS AFP/Getty Images)

Zheng lodged a "solemn representation with the U.S. side," Xinhua said, using standard diplomatic language for a complaint. A U.S. Embassy spokesman said he had no immediate comment.

A statement issued by the Foreign Ministry Monday night said the charges were based on "fabricated facts" and would jeopardize China-U.S. "cooperation and mutual trust."

"China is steadfast in upholding cybersecurity," said the statement, which was read again Tuesday on state television's midday news broadcast. "The Chinese government, the Chinese military and their relevant personnel have never engaged or participated in cyber-theft of trade secrets. The U.S. accusation against Chinese personnel is purely ungrounded and absurd."

In its statement, the Defense Ministry repeated the charges, but added that the U.S. accusations would send a chill through gradually warming relations between their two militaries.

"Up to now, relations between the China-U.S. militaries had been development well overall," the ministry said. "The U.S., by this action, betrays its commitment to building healthy, stable, reliable military-to-military relations and causes serious damage to mutual trust between the sides."

The Chinese and U.S. have launched a series of initiatives to reduce mutual suspicion and smooth communication. However, U.S. criticism of China's territorial assertions in the South China Sea and support for Japan and other Chinese rivals have consistently generated friction.

The hacking charges represent the biggest challenge to bilateral relations since an unprecedented private summit between President Obama and his counterpart Xi Jinping last summer.

The Chinese targeted big-name American makers of nuclear and solar technology, stealing confidential business information, sensitive trade secrets and internal communications for competitive advantage, according to a grand jury indictment that the Justice Department said should be a national "wake-up call" about cyber intrusions.

Intelligence officials have estimated that American companies lose about $250 billion every year in intellectual property -- much of it to the Chinese, reported CBS News correspondent Bob Orr.